Anonymous

Capps, Oral, Jr.

English

Research Papers in Economics

CHOICES
The magazine of food, farm, and resource issues
2nd Quarter 2006 • 21(2) CHOICES 53
A publication of the
American Agricultural
Economics Association
2nd Quarter 2006 • 21(2)
©1999–2006 CHOICES. All rights reserved. Articles may be reproduced or electronically distributed as long as attribution to Choices and the American
Agricultural Economics Association is maintained. Choices subscriptions are free and can be obtained through http://www.choicesmagazine.org.
Overview: Commodity Checkoff Programs
Gary W. Williams, Guest Editor and Oral Capps, Jr., Editor
Currently, there are a number of advertising and promo-
tion programs associated with agricultural commodities.
‘Got Milk?’ ‘Pork. The Other White Meat,’ ‘Cotton: The
Fabric of Our Lives,’ ‘Beef. It’s What’s for Dinner,’ and
‘American Lamb from American Land’ are examples of
messages from various commodity boards who are
attempting to impact the demand for their agricultural
products. These messages typically are labeled as generic
advertising and promotion and the institutional structure
for funding them is referred to as commodity checkoff
programs. This theme centers attention on why checkoff
programs were instituted initially, how program benefits
are measured, the costs associated with various programs,
the evidence to support their existence, and the legal chal-
lenges surrounding checkoff programs.  
Commodity checkoff programs are primarily coopera-
tive efforts by groups of suppliers of agricultural products
intended to enhance their individual and collective profit-
ability. Virtually every agricultural commodity has some
type of organization dedicated to promoting the economic
welfare of its producers funded through some form of fee
on sales by producers and often others in the marketing
chain. The term “checkoff” refers to the collection of a fee
and comes from the concept of checking off the appropri-
ate box on a form, like a tax return, to authorize a contri-
bution for a specific purpose, such as the public financing
of election campaigns, or, as in this case, the financing of
programs to enhance producer welfare.
The funds collected by checkoff groups are used pri-
marily to expand demand (both domestic and foreign)
through both generic advertising efforts and the develop-
ment of new uses of the associated commodities. Although
many checkoff programs also fund research intended to
reduce production costs and/or enhance yields, the share
of their total budgets spent on research is generally much
smaller than the share spent on demand-enhancement
activities.
Contributions to the earliest check-off programs were
voluntary. These voluntary programs, however, were
plagued by the problem of free-riders, which motivated
the supporters of some programs to pressure state, and
later federal, legislators to provide them with legislative
authority for mandatory checkoff contributions. Cur-
rently, federal checkoff programs are in effect for beef,
pork, soybeans, eggs, cotton, dairy, mushrooms, honey,
peanuts, popcorn, potatoes, watermelon, cultivated blue-
berries, Haas avocados, and mangos. In addition, federal
marketing orders for a wide variety of primarily fruits, veg-
etables, and nuts are authorized to conduct promotion and
research programs. Other checkoff organizations operate
under state authority. Also, organizations of commodity
producers and/or processors, like the Sugar Association,
operate generic promotion programs independent of any
state or federal authority.
In this issue of Choices, several authors explore the pur-
pose, impact, effectiveness, and legal status of commodity
checkoff programs. Ward describes the purpose of check-
off programs, as well as the functions and benefits of these
programs. Crespi and McEowen subsequently examine the
constitutionality of generic advertising and promotion
programs. Additionally, they focus on the repercussions of
the Supreme Court ruling in May 2005 regarding the beef
checkoff program. Wohlgenant deals with the importance
Articles in this Theme:
Overview: Commodity Checkoff Programs . . . . . . . . . . . . . . 53
Commodity Checkoff Programs and Generic Advertising. . 55
The Constitutionality of Generic Advertising Checkoff 
Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Retail-to-Farm Transmission of Generic Advertising 
Effects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Measuring the Effectiveness of Checkoff Programs . . . . . . 73
Producer Support for Checkoff Programs: The Case of 
Beef. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7954 CHOICES 2nd Quarter 2006 • 21(2)
of retail-to-farm price transmission,
the nature of checkoff assessments,
the effect of supply response, the role
of input substitution, the effect of
government intervention, the pres-
ence of market power, and the indus-
trialization of agriculture in evaluat-
ing the economic impacts associated
with generic advertising and promo-
tion. Williams and Capps discuss the
issues of defining and measuring the
effectiveness of checkoff programs.
They also center attention on com-
municating the measurement results
to program contributors and stake-
holders. Finally, Chung, Norwood,
and Ward investigate the degree of
producer support for the beef check-
off program.
Gary W. Williams is Professor and
Director of the Texas Agribusiness
Market Research Center, and Oral
Capps, Jr. is Professor and Southwest
Dairy Marketing Endowed Chair,
Department of Agricultural Econom-
ics, Texas A&M University, College
Station, TX.

Overview: Commodity Checkoff Programs

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